Premium Essay

Kansas City Zephyrs Case Study

In: Business and Management

Submitted By dchaddy
Words 441
Pages 2
Chad Dellworth
Case: Kansas City Zephyrs Baseball Club: A Baseball Accounting Dispute
ACCT 6350

1. How Should Bill Ahern resolve each of the accounting conflicts between the owners and the players?

After meeting with both the owners and the players, Bill concludes that the three main accounting areas of concern between both parties are:

* 1) Roster depreciation * 2) Player compensation * 3) Owners’ stadium fees

In all of three of these conflicts, I noticed that the players tend to make more assumptions about the owners’ intentions than they do factual statements regarding sound accounting principles. I only mention this because Paul, the players’ lawyer, felt that the owners were being greedy and “hiding” profit in their accounting books rather than split their extra income with the players.

According to our class reading Accounting for Property, Plant, and Equipment and Other Assets, all assets—in this case being the players—have a depreciation value. Unfortunately, PBPA goes against this statement by claiming that the players shouldn’t be depreciated at all; in fact, they went as far as to say that the players add value if anything. Now I don’t exactly claim to be an expert on baseball myself, but I know enough to safely say that baseball players tend to wear down over time. For example, pitchers are known for having shorter careers by throwing out their arm. Therefore playing baseball has to be taxing, not to mention risky. If anything, baseball players should only be viewed as from a depreciation standpoint.

Another dispute that occurs between the players and the owners is the notion that a good portion of the players’ compensation becomes a deferred expenditure rather than showing the whole amount as a current expense. However, our class reading points out that deferred compensation must be expensed once earned.

The...

Similar Documents

Premium Essay

Kansas City Zephyrs Baseball Club, Inc. Case Study

...Kansas City Zephyrs Baseball Club, Inc. Case Study Antecedents: the Professional Baseball Players Association (PBPA) and the Owner-Player Committee (OPC) were engaged in a collective bargaining dispute where the PBPA believes they should share in the teams' profits. The OPC maintains, however, that the teams were losing money each year. Both sides had independent meetings with an arbitrator to evaluate and recommend a viable decision ”Who is right?” The case illustrate major areas in which both sides disputed the way the financial information is been presented, and the way key accounting concepts had been used taking in consideration the recognition of revenues and the matching concept: 1. - Players salary expenses, current roster salary, amortization of signing bonuses and non-roster guaranteed contract expenses 2. - Roster depreciation expense 3. - Related-party transactions (Stadium operations) 1. - Players salary expenses, current roster salary, amortization of signing bonuses and non-roster guaranteed contract expenses. A significant portion of players’ compensation packages is not paid in cash immediately. PBPA think the salaries due to players who are no longer on the roster should be recognized when the cash is paid out and not when the players leave the roster, GAAP however only allow the deferred compensation to be expensed when earned. Therefore, OPC is right. Some part of players’ signing bonuses as per the PBPA suggestion should be spread over...

Words: 549 - Pages: 3

Premium Essay

Kansas City Baseball Case Study

...Kansas City Zephyrs Case Study Chad Dellworth Case: Kansas City Zephyrs Baseball Club: A Baseball Accounting Dispute ACCT 6350 1. How Should Bill Ahern resolve each of the accounting conflicts between the owners and the players? After meeting with both the owners and the players, Bill concludes that the three main accounting areas of concern between both parties are: * 1) Roster depreciation * 2) Player compensation * 3) Owners’ stadium fees In all of three of these conflicts, I noticed that the players tend to make more assumptions about the owners’ intentions than they do factual statements regarding sound accounting principles. I only mention this because Paul, the players’ lawyer, felt that the owners were being greedy and “hiding” profit in their accounting books rather than split their extra income with the players. According to our class reading Accounting for Property, Plant, and Equipment and Other Assets, all assets—in this case being the players—have a depreciation value. Unfortunately, PBPA goes against this statement by claiming that the players shouldn’t be depreciated at all; in fact, they went as far as to say that the players add value if anything. Now I don’t exactly claim to be an expert on baseball myself, but I know enough to safely say that baseball players tend to wear down over time. For example, pitchers are known for having shorter careers by throwing out their arm. Therefore playing baseball has to be taxing, not to......

Words: 305 - Pages: 2

Premium Essay

Kansas City Zephyrs Assignment

...In the case study of the Kansas City Zephyrs Baseball Club, Inc. Bill Ahern the arbitrator was assigned to resolve the issue on the parties’ agreeing on the true profitability of the major league baseball teams. Both Zephyr’s owners and players disagree on three different areas: a) Roster depreciation, b) Overstated Player Salary Expense which entails current signing bonuses, roster salary, amortization of and non-roster guaranteed contract expense; and c) Related-Party Transactions (Stadium Operations). Roster Depreciation The owners recognize depreciation of a value placed on the player roster at the time the baseball club was purchased apparently because tax rules allowed them to do so. Tax rules allow this value to be set arbitrarily at a maximum of 50% of the purchase price. According to the owners the depreciation is capitalized and is being depreciated over six years. The players do not feel that any roster depreciation should be shown. They believe that the roster depreciation is providing numbers without any significance. The players further argue that depreciation expenses only arise when a team is sold therefore there can be two identical teams that reflect different results if one was sold and the other was not. Moreover, the players argue that rosters should appreciate not depreciate as players become more experienced with time. Economically speaking a baseball clubs’ most valuable asset is its player’s rosters and they obviously appreciate and......

Words: 812 - Pages: 4

Premium Essay

Notes

...The University of Illinois Executive MBA July 13, 2004 Tentative Syllabus Managerial Perspective on Financial Accounting Accountancy 401X; Fall 2004 Michael J. Sandretto, 225C David Kinley Hall (217) 244-6410 (office); (217) 352-4832 (home, before 10:30 p.m.) sandrett@uiuc.edu or michaeljsandretto@earthlink.net Texts: Antle, Rick, and Stanley J. Garstak, Financial Accounting, Southwestern (United States), second edition, 2004 (Antle). Palepu, Krishna G., Paul M. Healy, and Victor L. Bernard, Business Analysis and Valuation: Using Financial Statements, Text Only, Southwestern (United States), fourth edition, 2004 (Palepu). Background: Accounting is called the language of business for at least two reasons. First, accounting terms such as sales, revenues, profit, net income, costs, gross margin, expense, and capitalize are widely used in business. Any businessperson is expected to understand those terms. Second, managers rely on accounting to understand an organization’s economic condition at a point in time and its economic performance over a period of time. As a result, they use accounting information to communicate with others. Managerial Perspective on Financial Accounting will help you understand publicly available financial statements for publicly traded companies and financial statements prepared for internal use. It is also an introduction to financial statement analysis and valuation methods. The basic financial accounting methodology...

Words: 2809 - Pages: 12

Premium Essay

English

...|Word |Synonym |Sentence | |Abase |to humiliate, degrade, debase, corrupt, |Don’t abase yourself by accepting this offer. | | |disgrace | | |Abash |to bewilder, confound, confuse, puzzle, amaze,|That poor man felt abashed in the company of rich man & women. He was not at | |[uh-bash] |stun, leave speechless, bamboozle. |all abashed by his open admiration (প্রশংসা). | |Abate |to remove, lessen |We resumed our journey when the rain abated. Rather than leaving immediately, | | | |they waited for the storm to abate. | |Abdicate |to forsake, give up, (পরিত্যাগ করা, অস্বীকার |Edwar VIII abdicated the British throne to marry the woman he loved. Saddam was| | |করা), resign, relinquish, hand over, step down|abdicated from his throne. | | |from, abandon | ......

Words: 27003 - Pages: 109

Premium Essay

Barron 3500

...attention to the words you thought you knew. See whether any of them are defined in an unexpected way. If they are, make a special note of them. As you know from the preceding chapters, SAT often stumps students with questions based on unfamiliar meanings of familiar-looking words. Use the flash cards in the back of this book and create others for the words you want to master. Work up memory tricks to help yourself remember them. Try using them on your parents and friends. Not only will going over these high-frequency words reassure you that you do know some SAT-type words, but also it may well help you on the actual day of the test. These words have turned up on recent tests; some of them may well turn up on the test you take. The more you study actual SAT critical reading questions, the more you realize one thing: the key to doing well on the critical reading portions of SAT is a strong working vocabulary of college-level words....

Words: 92038 - Pages: 369

Premium Essay

Will Do Next Time

...Instructor’s Manual and Test Bank to accompany A First Look at Communication Theory Sixth Edition Em Griffin Wheaton College prepared by Glen McClish San Diego State University and Emily J. Langan Wheaton College Published by McGraw­Hill, an imprint of The McGraw­Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright Ó 2006,  2003, 2000, 1997, 1994, 1991 by The McGraw­Hill Companies, Inc. All rights reserved. The contents, or parts thereof, may be reproduced in print form  solely for classroom use with A First Look At Communication Theory provided such reproductions bear copyright notice, but may not be reproduced in  any other form or for any other purpose without the prior written consent of The McGraw­Hill Companies, Inc., including, but not limited to, in any  network or other electronic storage or transmission, or broadcast for distance learning. PREFACE Rationale We agreed to produce the instructor’s manual for the sixth edition of A First Look at Communication Theory because it’s a first-rate book and because we enjoy talking and writing about pedagogy. Yet when we recall the discussions we’ve had with colleagues about instructor’s manuals over the years, two unnerving comments stick with us: “I don’t find them much help”; and (even worse) “I never look at them.” And, if the truth be told, we were often the people making such points! With these statements in mind, we have done some serious soul-searching about the texts that so many......

Words: 159106 - Pages: 637

Free Essay

80 Days

...MASTER, THE OTHER AS MAN M r. Phileas Fogg lived, in 1872, at No. 7, Saville Row, Burlington Gardens, the house in which Sheridan died in 1814. He was one of the most noticeable members of the Reform Club, though he seemed always to avoid attracting attention; an enigmatical personage, about whom little was known, except that he was a polished man of the world. People said that he resembled Byron—at least that his head was Byronic; but he was a bearded, tranquil Byron, who might live on a thousand years without growing old. Certainly an Englishman, it was more doubtful whether Phileas Fogg was a Londoner. He was never seen on ‘Change, nor at the Bank, nor in the counting-rooms of the  Around the World in 80 Days ‘City”; no ships ever came into London docks of which he was the owner; he had no public employment; he had never been entered at any of the Inns of Court, either at the Temple, or Lincoln’s Inn, or Gray’s Inn; nor had his voice ever resounded in the Court of Chancery, or in the Exchequer, or the Queen’s Bench, or the Ecclesiastical Courts. He certainly was not a manufacturer; nor was he a merchant or a gentleman farmer. His name was strange to the scientific and learned societies, and he never was known to take part in the sage deliberations of the Royal Institution or the London Institution, the Artisan’s Association, or the Institution of Arts and Sciences. He belonged, in fact, to none of the numerous societies which swarm in the......

Words: 65314 - Pages: 262

Free Essay

Hello

...3. The Four Life Positions 4. We Can Change 5. Analysing the Transaction 6. How We Differ 7. How We Use Time 8. P-A-C and Marriage 9. P-A-C and Children 10. P-A-C and Adolescents 11. When Is Treatment Necessary? 12. P-A-C and Moral Values 13. Social Implications of P-A-C References Index (Removed) Scan / Edit Notes Versions available and duly posted: Format: v1.0 (Text) Format: v1.0 (PDB - open format) Format: v1.5 (HTML) Format: v1.5 (Ubook-HTML) Genera: Self-Help Extra's: Pictures Included Copyright: 1969 Scanned: November 8 2003 Posted to: alt.binaries.e-book (HTML-PIC-TEXT-PDB Bundle) alt.binaries.e-book (HTML-UBook) Note: The U-Book version is viewable on PC and PPC (Pocket PC). Occasionally a PDF file will be produced in the case of an extremely difficult book. 1. The Html, Text and Pdb versions are bundled together in one rar file. (a.b.e) 2. The Ubook version is in zip (html) format (instead of rar). (a.b.e) ~~~~ Structure: (Folder and Sub Folders) {Main Folder} - HTML Files | |- {PDB} | |- {Pic} - Graphic files | |- {Text} - Text File -Salmun About The Author Thomas A. Harris is a practising psychiatrist in Sacramento, California. Born in Texas, he received his B.S. degree in 1938 from the University of Arkansas Medical School and his M.D. in 1940 from Temple University Medical School. In 1942 he began training in psychiatry at St Elizabeth's Hospital in Washington, after which he served as a psychiatrist in the Navy. In 1947 he was appointed Chief of the......

Words: 92067 - Pages: 369

Free Essay

Test2

...62118 0/nm 1/n1 2/nm 3/nm 4/nm 5/nm 6/nm 7/nm 8/nm 9/nm 1990s 0th/pt 1st/p 1th/tc 2nd/p 2th/tc 3rd/p 3th/tc 4th/pt 5th/pt 6th/pt 7th/pt 8th/pt 9th/pt 0s/pt a A AA AAA Aachen/M aardvark/SM Aaren/M Aarhus/M Aarika/M Aaron/M AB aback abacus/SM abaft Abagael/M Abagail/M abalone/SM abandoner/M abandon/LGDRS abandonment/SM abase/LGDSR abasement/S abaser/M abashed/UY abashment/MS abash/SDLG abate/DSRLG abated/U abatement/MS abater/M abattoir/SM Abba/M Abbe/M abbé/S abbess/SM Abbey/M abbey/MS Abbie/M Abbi/M Abbot/M abbot/MS Abbott/M abbr abbrev abbreviated/UA abbreviates/A abbreviate/XDSNG abbreviating/A abbreviation/M Abbye/M Abby/M ABC/M Abdel/M abdicate/NGDSX abdication/M abdomen/SM abdominal/YS abduct/DGS abduction/SM abductor/SM Abdul/M ab/DY abeam Abelard/M Abel/M Abelson/M Abe/M Aberdeen/M Abernathy/M aberrant/YS aberrational aberration/SM abet/S abetted abetting abettor/SM Abeu/M abeyance/MS abeyant Abey/M abhorred abhorrence/MS abhorrent/Y abhorrer/M abhorring abhor/S abidance/MS abide/JGSR abider/M abiding/Y Abidjan/M Abie/M Abigael/M Abigail/M Abigale/M Abilene/M ability/IMES abjection/MS abjectness/SM abject/SGPDY abjuration/SM abjuratory abjurer/M abjure/ZGSRD ablate/VGNSDX ablation/M ablative/SY ablaze abler/E ables/E ablest able/U abloom ablution/MS Ab/M ABM/S abnegate/NGSDX abnegation/M Abner/M abnormality/SM abnormal/SY ab......

Words: 113589 - Pages: 455